www.pwc.

com/globalsoftware100

Technology Institute

PwC Global 100

Software Leaders
Converging forces are building that could
re-shape the entire industry
 About

The interviews To learn more

In addition to its quantitative findings, this report also includes insights from interviews www.pcw.com/globalsoftware100
with 28 software executives. We thank all of them for their contributions:

Adobe Cegid Infosys Newgen Software Shanghai Boke Information

Mark Garrett Patrick Bertrand Basab Pradhan Diwakar Nigam Technology
CFO CEO Senior Vice President and Managing Director Shen Guokang
Head of Global Sales President
Advanced Computer Software CollabNet OnMobile Global
Vin Murria Jim Ensell Jive Software Mouli Raman Splunk
CEO Chief Marketing and Strategy Officer Tony Zingale Managing Director Godfrey Sullivan
Chairman and CEO Chairman and CEO
AsiaInfo-Linkage Dassault Systèmes Ramco Systems
Andy Tiller Bernard Charlès K.K. Ashisuto Virender Aggarwal Talend
Vice President, Corporate CEO Tatsuo Otsuka CEO Bertrand Diard
Product Marketing President Co-founder and CEO
EasyVista Red Hat
AVEVA Jamal Labed Kewill Systems Jim Whitehurst Tally Solutions
Les Elby Co-founder and CEO Evan Puzey President and CEO Bharat Goenka
Vice President, Business Strategy Chief Marketing Officer Co-founder and Managing Director
Hitachi, Ltd., Information SAP
BMC Software & Telecommunications NetSuite Jonathan Becher Trend Micro
Ken Berryman Systems Company Jim McGeever Chief Marketing Officer Mahendra Negi
Senior Vice President, Strategy Munehiro Hashimoto COO COO/CFO
and Corporate Development Division President, SAS
IT Platform Business Neusoft Jim Davis TSIA
Management Division Dr. Liu Jiren Senior Vice President and J.B. Wood
Chairman and CEO Chief Marketing Officer President and CEO
Welcome
The global software industry is now in the
midst of an evolutionary change as several
forces in the market are converging,
triggering deep and permanent shifts in
the basic structure of the business.
First, vendors are beginning to feel the
effects of the software-as-a-service (SaaS)
technology on their business models
and markets. How vendors respond will
be crucial to the future health and even
viability of their companies.
Second, the explosion in the number of
mobile devices, the ubiquity of broadband
connectivity and the consumerisation of
IT are shifting the balance of power in
enterprise software purchasing from the
software vendor to the individual user.
These trends are forcing software
companies to change nearly everything—
from the way they develop products to
how they price, sell, deliver and service
them. And many companies are caught
Mark McCaffrey in a conundrum: While they must
Global Software Leader
quickly adapt to this new world, they
mark.mccaffrey@us.pwc.com
still earn most of their revenue from
+1 408 817 4199 the old model—traditional enterprise
software licensing.
Meanwhile, the software market
continues to broaden—in terms of both
geography and types of competitors. As
vendors expand around the world, they
are running into regional competitors
more attuned to local needs as well
as emerging competitors from other
industries that are starting to launch their
own software products in the form of
online applications.
Additionally, the competition for key skills
and experience has become a global war
for talent. Large vendors are expanding to
regions beyond their typical recruitment
grounds in search of top-flight engineers,
programmers, and executives. Companies
are using their checkbooks and stock
market valuations to acquire companies
for their technology as well as their
talented people.
This edition of the Global 100 Software
Leaders Report, which we launched
in 2010, continues PwC’s tradition of
monitoring and analysing the leading
companies and trends in the industry.
This year, we’ve added unique statistics
on the number of large companies
participating in the SaaS market as well
May 2013 PwC Global 100 Software Leaders 3
as the proportion of revenue they derive
from this form of cloud computing. The
data highlight how this delivery model
is starting to become a key part of the
foundation of the software business.
Even more dramatic than the numbers,
however, are the comments of more than
two dozen leading software industry
executives from around the globe. We
thank these executives for their time and
willingness to share their insights on what
is happening and how these trends are
changing their strategies as well as the
day-to-day operation of their companies.
We hope this report gives you a deeper
understanding of the underlying forces
that are influencing the future of the
software industry, and that you use this
knowledge to your advantage. Please
contact me or the other practice leaders
in this report if you have questions or
would like to discuss how we can help your
organisation during this tumultuous era.
Acknowledgements
Software industry associations
The software industry is a key source of innovation today for
nearly all aspects of business and even society. From low-cost
mobile apps to sophisticated enterprise programs to data analytics,
software adds value, enhances productivity and even improves the
quality of life for billions of people around the world.
Even more opportunities—as well as challenges—appear today.
As the new SaaS consumption model gains in popularity at the
expense of the traditional licensing model, vendors must transform
their organisations. A major by-product of SaaS adoption is that
software companies’ financial results will align more closely than
before with the value their customers derive from the software.
This next-generation, ‘outcome-driven’ operating model will be
game changing. Few on-premise software companies today know
J.B. Wood
President and CEO
TSIA
US
The Technology Services Industry Association (TSIA) is the world’s leading
organisation dedicated to advancing the business of technology services.
Technology services organisations large and small look to TSIA for world-class
business frameworks, best practices based on real-world results, detailed
performance benchmarking, exceptional peer networking opportunities and high-
profile certification and awards programs. TSIA corporate members represent
the world’s top technology companies as well as scores of innovative small and
mid-size businesses in four major markets: enterprise IT & telecom, consumer
technology, healthcare & healthcare IT, and industrial equipment & technology.
4 PwC Global 100 Software Leaders May 2013
how or whether their customers are deriving real business value
from their technology. Far fewer actually have the ability to engage
with their customers to increase that value. Those companies
that have this ability will also have the potential to achieve higher
growth by more effectively satisfying customer demand.
Solid analysis and insight into these trends, including the
information in this report, are valuable in guiding software
vendors, industry associations, governments and enterprises
through these transitions. The Technology Services Industry
Association (TSIA) and the French Association of Software
Publishers and Internet Solutions (AFDEL) are pleased to support
PwC in providing a strong tool to analyse IT transformation all
over the world.
Jamal Labed
President
AFDEL
France
The French Association of Software Publishers and Internet Solutions,
AFDEL, aims to bring together software and Internet companies as a
community and to be the spokesperson for the digital industry in France.
AFDEL currently has more than 330 members (representing approximately
€3.5 billion in revenue) throughout France. Members include major
international groups, SMEs and start-ups. To learn more please visit
http://www.afdel.fr/.
Contents
Introduction 7

Global 100 Software Leaders 10

Emphasis on the ‘consumer’ in consumerisation of IT 12

North America 100 15

As SaaS accelerates, so do dilemmas 18

EMEA 100 23

Using data analytics externally and internally 26

Consolidation 28

Emerging Markets 100 29

Globalisation 33

Conclusion 36

Methodology 37

Of further interest 38

PwC can help: A list of local professionals 39

May 2013 PwC Global 100 Software Leaders 5

Introduction
“The vision that financial
investors and clients have
of the software industry is
not accurate anymore. The
industry is changing.”
Bernard Charlès
Dassault Systèmes
The state of the software industry appears
relatively calm. On the surface, that is.
The well-known trends—cloud, software-
as-a-service (SaaS), mobile devices and
consumerisation of IT—are making their
own individual waves for software vendors.
Dive beneath the surface, however, and
you will find a strong undertow created
by the combination of all these forces,
pulling the industry in new directions. It’s
a multiplier effect that is redefining how
software vendors develop, market, sell,
distribute and support their products.
These changes may seem evolutionary, as
suggested by the SaaS data in this year’s
PwC Global 100 Software Leaders (Pages
10-11). SaaS only represents an estimated
4.9 percent of their total software
revenues in 2011. But for many vendors,
the small percentage belies the amount
of current sales discussions that centre on
the cloud. Either way, whether any single
software vendor chooses to embrace these
changes quickly, slowly, partially, wholly
or not at all, these trends will reshape
the industry for everyone. The prudent
software vendors are already trying to
plan the tricky transition that clearly lies
ahead, and specifically are:
• focusing more sharply than ever on
what customers, especially individual
users in enterprises, want;
• collaborating with customers and
partners more than ever;
• rethinking various aspects of their
business models, including delivery
methods, pricing strategies and sales
compensation options; and
• increasing the differentiation in the
quality and scope of services they offer.
“The vision that financial investors and clients
have of the software industry is not accurate
anymore. The industry is changing,” says
Bernard Charlès, CEO of Dassault Systèmes,
No. 16 on the Global 100, and one of more
than two dozen software industry executives
interviewed. “It no longer makes sense to
refer to the ‘software industry’ as a stand-
alone industry while new market categories
are emerging. ‘Experience’ is one of them,
and a strategic one in today’s ‘experience
economy’. That is why Dassault Systèmes’
3DEXPERIENCE platform combines
applications, content and communities to
create more value for the consumer.”
As we all know, cloud computing enables a
new business model—the selling of software
May 2013 PwC Global 100 Software Leaders 7
as a service, either by subscription or as a
true pay-as-you-go usage model. Add the
explosion of mobile devices, the ubiquity of
wireless networks and the consumerisation
of IT, and you get further innovation—and
confusion—in business models. These
forces are causing deep structural changes,
fundamentally altering how companies do
business. What exactly are software vendors
selling? How much should it cost? And to
whom should they be selling it?
The answers aren’t entirely clear yet. But
the major components of the reshaped
industry are likely to include:
• low-cost, ubiquitous mobile apps
powered by heavy-duty software and
hardware at the data centre either within
the enterprise or in a public cloud;
• a plethora of delivery methods
from traditional licensing to SaaS,
subscriptions and even ‘freemiums’
offered to encourage sales;
• a growing ecosystem of services and
functions, including PaaS, IaaS and
XaaS like data-analytics as a service; and
• an entirely new raison d’être: to
deliver the customer outcomes, not
just technology.
 IDC projects subscription
revenue (including SaaS)
to grow at a 17.5%
compounded annual rate,
reaching 24% of total
software revenue by 2016.
As we compiled the Global 100, there
were definite signs in the data, and even
more clearly in the interviews, that these
forces are already changing the software
industry. Specifically:
• Because the cloud enables greater
access to customer data and the ability
to directly connect—even intervene—in
customer use, it may be changing the
very definition of the value proposition
tech companies must offer; many in
the industry are wondering what new
capabilities will be required to succeed
in this new environment.
• Although the traditional license model
will be around for years to come, it is
slowly losing its dominance to SaaS
and subscription models. Most large,
traditional software vendors are moving
toward SaaS, albeit gradually, and will
8 PwC Global 100 Software Leaders May 2013
4%
Annual growth in
license revenue
be faced with significant challenges as
they make the transition.
• The individual customer is becoming
king. Enterprise IT is not going away,
but power and influence have shifted
from the corporate entity, which used
to dictate what technology to buy and
when, to the individual user. That
monumental shift makes strengthening
engagement and establishing an
enduring relationship with end users
essential to software vendor survival.
• For the foreseeable future, there will be
a spectrum of business models, ranging
from the traditional licensed software
to pure SaaS to hybrid approaches
that come with their own dilemmas.
The challenge for software vendors
is to figure out how to make one of
these business models work, or risk
losing customers.
17.5%
Subscription revenue
(including SaaS)
• Pricing is proving to be the biggest
conundrum in this evolution. Vendors
are already struggling to explain and
justify the difference in value between a
low-cost mobile app and a full-strength,
licensed enterprise software package.
In this report, we explore all these issues
in light of our compilation of software
revenues and related data for calendar
year 2011, the most recent set of complete
financials available. In all, we report
software revenues for 294 vendors
worldwide, including the top 100 globally,
the top 100 in two geographically defined
markets—North America (Pages 16-17),
and Europe/Middle East/Africa (EMEA)
(Pages 24-25)—and one market defined
by maturity, Emerging Markets (China,
India, Brazil and others) (Pages 30-31).
Some vendors appear on more than one
list. (See Methodology, page 37)
Unlike the previous PwC Global 100
Software Leaders report, published in
2010, we are now able to report estimated
revenues from SaaS, which indicate how
and where the above trends are starting to
roil the waters of the traditional software
market. Finally, through interviews with
software executives around the world,
including from companies on our lists and
some not on them, we dive deeply into
an examination of these trends and their
likely impacts on the software industry.
The software industry recorded almost
US$325 billion in license, subscription,
maintenance and other revenues in 2011,
due to relatively strong growth rates despite
the weak global economies. According
to IDC estimates, subscription revenue
jumped almost 23 percent in 2011, whilst
overall maintenance and services revenues
grew almost 8 percent. This growth
reflects the software industry’s continuing
contribution to overall productivity and
societal innovation, which in turn help
grow the overall global economy as well as
improve the lives of billions of people.

Figure 1:  Top 10 SaaS revenues amongst the Global 100

SaaS revenue as
Country 2011 SaaS 2011 software
Company % of software
HQ revenue (US$M) revenue (US$M)
revenue
Salesforce.com US $1,848 $2,008.7 92.0%
Intuit US $950 $2,456.5 38.7%
Cisco US $831 $1,796.9 46.3%
Microsoft US $788 $57,668.4 1.4%
Symantec US $572 $6,330.3 9.0%
Google Inc. US $462 $575.6 80.3%
Oracle US $446 $26,175.9 1.7%
Adobe US $410 $4,154.1 9.9%
Blackboard US $396 $411.7 96.2%
DATEV Germany $395 $974.2 40.5%

Total $7,098 $102,552.16 6.9%

May 2013 PwC Global 100 Software Leaders 9

Global 100 Software Leaders

2011 SaaS 2011 SaaS

SaaS 2011 total Software SaaS 2011 total Software
Rank

Rank
Country software revenue as % Country software revenue as %
Company revenue revenue revenue as Company revenue revenue revenue as
HQ revenue of software HQ revenue of software
(US$M) (US$M) % of total (US$M) (US$M) % of total
(US$M) revenue* (US$M) revenue*
1 Microsoft US $57,668.40 $788 $72,052.00 80% 1.4% 26 NEC Japan $1,614.97 $45 $38,046.34 4% 2.8%
2 IBM US $28,187.75 $265 $106,916.00 26% 0.9% 27 SunGard US $1,471.45 $45 $4,499.00 33% 3.1%
3 Oracle US $26,175.89 $446 $47,659.33 55% 1.7% 28 Synopsys US $1,459.72 $40 $1,576.14 93% 2.7%
4 SAP Germany $15,498.14 $220 $19,794.98 78% 1.4% 29 McKesson US $1,357.87 $5 $3,326.00 41% 0.4%
û
5 Ericsson Sweden $8,034.67 – $34,933.33 23% 0.0% 30 Apple US $1,355.39 $10 $127,841.00 1% 0.7%
6 Symantec US $6,330.31 $572 $6,722.00 94% 9.0% 31 NetApp US $1,289.92 – $5,925.00 22% 0.0%
7 HP US $5,316.26 $228 $125,734.33 4% 4.3% 32 Trend Micro Japan $1,208.69 $50 $1,516.70 80% 4.1%
8 EMC (excluding Vmware) US $4,884.92 $90 $20,007.50 24% 1.8% 33 ESRI US $1,138.72 $25 $1,439.00 79% 2.2%
9 CA Technologies US $4,375.31 $66 $4,754.00 92% 1.5% 34 Hexagon Sweden $1,103.50 – $3,016.95 37% 0.0%
10 Adobe US $4,154.07 $410 $4,223.70 98% 9.9% Cadence Design
35 US $1,002.15 $15 $1,149.84 87% 1.5%
Systems
11 VMware US $3,485.83 $50 $3,767.00 93% 1.4%
36 Teradata US $982.59 $50 $2,362.00 42% 5.1%
12 Fujitsu Japan $3,063.66 $300 $54,893.00 6% 9.8%
37 DATEV Germany $974.17 $395 $1,016.44 96% 40.5%
13 SAS US $2,524.87 $56 $2,725.00 93% 2.2%
38 Software AG Germany $948.11 – $1,527.60 62% 0.0%
14 Intuit US $2,456.47 $950 $4,007.00 61% 38.7%
39 PTC US $943.99 – $1,220.10 77% 0.0%
15 Siemens Germany $2,369.74 – $102,250.44 2% 0.0%
40 Red Hat US $934.80 $25 $1,100.00 85% 2.7%
16 Dassault Systèmes France $2,235.61 – $2,479.94 90% 0.0%
41 OpenText Canada $923.60 $17 $1,157.90 80% 1.8%
17 Autodesk US $2,120.03 $70 $2,194.03 97% 3.3%
42 Mentor Graphics US $905.84 – $1,010.29 90% 0.0%
18 Salesforce.com US $2,008.69 $1,848 $2,208.25 91% 92.0%
43 Attachmate US $904.71 – $970.64 93% 0.0%
19 BMC Software US $1,961.70 $10 $2,169.50 90% 0.5%
44 Avaya US $884.37 $15 $5,547.00 16% 1.7%
20 Hitachi Japan $1,918.92 $15 $115,754.00 2% 0.8%
Nuance
45 US $849.65 $5 $1,375.56 62% 0.6%
21 Infor US $1,889.60 $20 $2,131.36 89% 1.1% Communications
22 Sage UK $1,871.63 $29 $2,138.91 88% 1.5% 46 Wolters Kluwer Netherlands $839.70 $16 $4,665.01 18% 1.9%
23 Cisco US $1,796.85 $831 $44,471.00 4% 46.3% 47 Quest Software** US $800.71 $10 $857.00 93% 1.2%
24 Intel US $1,704.52 $80 $53,999.00 3% 4.7% 48 Compuware US $780.90 $95 $993.00 79% 12.2%
25 Citrix US $1,644.71 $374 $2,206.50 75% 22.7% 49 TIBCO US $717.68 $3 $932.00 77% 0.4%
50 Cerner US $701.34 $176 $2,203.15 32% 25.1%

Data compiled by the Global Software Business Strategies Group at IDC. * 0.0% indicates SaaS revenue of less than 0.5% of software revenue
û Sourced from Ericsson’s 2011 Annual Report rather than IDC
** Acquired after 2011

10 PwC Global 100 Software Leaders May 2013

 2011 SaaS 2011 SaaS
SaaS 2011 total Software SaaS 2011 total Software
Rank

Rank
Country software revenue as % Country software revenue as %
Company revenue revenue revenue as Company revenue revenue revenue as
HQ revenue of software HQ revenue of software
(US$M) (US$M) % of total (US$M) (US$M) % of total
(US$M) revenue* (US$M) revenue*
51 Wincor Nixdorf Germany $682.89 – $3,237.97 21% 0.0% 76 Pitney Bowes Software US $448.74 $39 $5,277.97 9% 8.7%
52 Ansys US $671.36 $1 $691.45 97% 0.1% 77 Unit4 Netherlands $418.20 $25 $632.43 66% 6.0%
53 Informatica US $667.73 $7 $784.00 85% 1.0% 78 Agfa HealthCare Belgium $415.00 $7 $1,637.06 25% 1.7%
Siemens Enterprise 79 Micro Focus UK $412.03 – $434.80 95% 0.0%
54 Germany $639.64 – $2,920.85 22% 0.0%
Communications
80 Blackboard US $411.68 $396 $513.69 80% 96.2%
55 TOTVS Brazil $631.95 $14 $741.00 85% 2.2%
81 GXS US $411.21 $350 $479.89 86% 85.1%
56 Intergraph** US $622.80 – $1,037.80 60% 0.0%
82 MicroStrategy US $401.34 $35 $562.00 71% 8.7%
57 Kaspersky Lab Russia $613.04 – $615.43 100% 0.0%
83 JDA Software Group US $396.70 $10 $671.75 59% 2.5%
58 Google US $575.62 $462 $37,905.00 2% 80.3%
84 Invensys UK $387.50 – $4,070.67 10% 0.0%
59 Fidelity National US $574.66 – $5,751.30 10% 0.0%
85 Aspect Software US $384.75 $7 $525.36 73% 1.8%
60 SWIFT Belgium $568.49 – $738.56 77% 0.0%
Northgate Information
61 Hitachi Data Systems US $564.40 – $687.11 82% 0.0% 86 UK $375.90 $20 $1,118.72 34% 5.3%
Solutions
62 Fiserv US $542.06 $60 $4,337.00 12% 11.1% 87 Visma Norway $374.51 $10 $916.52 41% 2.7%
63 Kronos US $538.00 $5 $823.00 65% 0.9% 88 Amdocs Israel $371.88 $20 $3,177.73 12% 5.4%
64 ADP US $523.94 $205 $10,349.90 5% 39.1% 89 Cegedim France $371.39 $190 $1,267.79 29% 51.2%
65 FICO (formerly Fair Isaac) US $517.37 – $634.10 82% 0.0% 90 Ariba** US $366.44 $259 $479.08 76% 70.7%
66 Bentley Systems US $514.08 $64 $523.00 98% 12.5% 91 Fidessa UK $366.13 $50 $446.19 82% 13.7%
67 Micros Systems US $503.99 $6 $1,052.89 48% 1.2% 92 Sophos UK $366.01 $61 $390.00 94% 16.7%
68 Verint Systems US $496.40 $54 $782.65 63% 10.9% 93 Neusoft China $365.16 $18 $912.90 40% 5.0%
69 Meditech US $487.55 – $545.22 89% 0.0% 94 Unisys US $360.20 $167 $3,854.00 9% 46.4%
70 Progress Software US $482.70 $40 $482.70 100% 8.3% 95 Concur Technologies US $358.51 $274 $369.64 97% 76.4%
71 Acision UK $474.11 $10 $711.17 67% 2.1% 96 CommVault US $351.53 $125 $384.00 92% 35.6%
72 Misys UK $473.51 $98 $575.41 82% 20.7% CompuGROUP
97 Germany $340.98 $40 $551.57 62% 11.8%
Holding
73 Constellation Software Canada $468.92 – $571.65 82% 0.0%
98 Epicor US $340.48 $27 $477.54 71% 7.9%
Genesys
74 Telecommunications US $456.77 $10 $565.56 81% 2.2% 99 InterSystems US $339.22 – $385.00 88% 0.0%
Laboratories
100 ACI Worldwide US $338.18 – $465.00 73% 0.0%
75 NICE Systems Israel $452.48 – $793.83 57% 0.0%
Total $242,991.25 $11,927 $1,163,326 21% 4.9%

Data compiled by the Global Software Business Strategies Group at IDC. * 0.0% indicates SaaS revenue of less than 0.5% of software revenue
** Acquired after 2011

May 2013 PwC Global 100 Software Leaders 11

Emphasis on the ‘consumer’
in consumerisation of IT
Although it isn’t new, the deep implications
of consumerisation of IT are only now
starting to hit home for software vendors.
While enterprises have been adjusting to a
flood of smartphones and tablets, as well
as the increasing use of consumer-grade
cloud services like Dropbox, the rules of the
enterprise software sales game are changing.
In an age of easy-to-use cloud services and
low-cost apps, software vendors have realised
the CIO is no longer the only customer to
satisfy; they must engage the actual user if
they want to keep enterprise sales.
“Customer loyalty is going to become more
and more important,” says Jim Whitehurst,
president and CEO of Red Hat, No. 40 on
the Global 100. “Our biggest risk is people
saying, ‘we’re going to stop paying you.’ ”
Cloud, SaaS and other subscription models
make it easier for customers to switch
vendors, notes Jim Ensell, chief marketing
and strategy officer at CollabNet, developer
of cloud-based development tools and
platforms. “A subscription business model
places significant focus on renewals. That
means there is a big, big onus on us to
really focus on service levels to make sure
we have happy users,” Ensell says.
12 PwC Global 100 Software Leaders May 2013
More than ever, customer loyalty can last two years,” says Jonathan Becher,
mean the difference between profit and chief marketing officer at SAP, No. 4 on
loss. “We lose money in the first couple of the Global 100. “Our investments around
years after signing up a new customer, so insights from Big Data, streamlining
retention is crucial,” says Jim McGeever, marketing, and customer experience mean “Customer loyalty is
COO of NetSuite, a SaaS vendor, and that we’ve nearly tripled our technology going to become more
No. 91 on the North America 100. “That investment in that time frame.”
fundamentally changes the relationship.
and more important.”
We have a vested interest in maintaining Jim Whitehurst
a high level of usage and giving them high “There is a big, big onus on Red Hat
value from the product.” us to really focus on service
All of this makes software sales more
levels to make sure we have
like a mobile phone service plan than a happy users.”
traditional enterprise software sale, but in Jim Ensell
many cases without the two-year contract. CollabNet “We lose money in the first couple
“The market is changing from B2B to
end-user-centric and this requires us to of years after signing up a new
understand the consumers better and align customer, so retention is crucial.”
all our activities like product development Jim McGeever
and marketing towards them. This will NetSuite
be a bigger shift for us,” says Mouli “The market is
Raman, managing director of India-based changing from
OnMobile Global, No. 21 on the Emerging B2B to end-user-
Markets 100. That not only makes churn
rate an important factor, it also makes
centric.”
marketing much more important, a Mouli Raman
fact spending priorities are starting to OnMobile Global
reflect. “Like many marketers, we have
invested heavily in technology over the
 Will we start to see more television
commercials for Adobe or NetSuite during
major sporting events? Perhaps. Software
companies are already directly engaging
customers in many ways. They are using
social media to interact with consumers
“Like many and analytics to understand how people
marketers, we use their products, to quickly improve
have invested features and functions. NetSuite has built a
following of more than 220,000 on Twitter
heavily in in just 18 months, according to McGeever.
technology “I don’t think any successful business,
over the last especially a technology business, can exist
two years.” without embracing social media,” he says.
Jonathan Becher
Adds Jim Davis, senior vice president and
SAP
chief marketing officer of SAS, No. 13 on
the Global 100, “We take social media very
seriously. We do not view social media just
“Our Creative as a channel to broadcast information.
Cloud offering will Rather, we believe that it is important to
become a platform participate in discussions and become a
for our partners to good listener. Understanding sentiment is
offer services to our critical. We use complementary marketing
approaches to address those sentiments.”
customers.”
Mark Garrett
Adobe “We take social media very
seriously. We do not view
social media just as a channel
to broadcast information.”
Jim Davis
SAS
In fact, creating an ecosystem around
software, a community that involves
users, other service providers and new
sales channels, is a crucial component
of this engagement. In 2012, Adobe,
No. 10 on the Global 100, started a US$50
a month subscription service, called
Creative Cloud. In this way, the company
is shifting to a subscription model with
cloud-based services and forging a closer
bond with customers. The idea is to build
a community of creative professionals
that over time also attracts other service
providers. CFO Mark Garrett expects
Adobe’s subscription revenue will grow
faster than its perpetual license revenue.
That growth will largely depend on the
success of building this community. “Our
Creative Cloud offering will become a
platform for our partners to offer services
to our customers.”
The young and the restless move to the cloud
• By 2016, nearly one of every US$6
spent on packaged software, including
operating systems and applications,
and nearly one of every US$5 spent
on applications will be consumed via
the cloud.
• By the end of 2012, an estimated 82
percent of new software companies
were in the business of creating, selling
and provisioning SaaS rather than
offering a packaged product.
Source: “Worldwide SaaS and Cloud Software 2012-16 Forecast and 2011 Vendor Shares.”
May 2013 PwC Global 100 Software Leaders 13
More vendors are also adopting the
online content and apps store model to
sell directly to consumers. Due to the
overwhelming success of apps stores
and online content, users now expect
apps for US$9.99, US$2.99 or even free.
This is another major implication of the
consumerisation of IT, and it is shaking
the very foundation of the enterprise
software industry. “There is an expectation
amongst customers that cost should fall
significantly,” says Red Hat’s Whitehurst.
“The enterprise is getting compared
to Google in terms of what technology
should cost.”
In short, customer perception of the value
of software has changed dramatically.
Vendors must develop strategies to counter
the expectation that software should be
free. It may be an uphill battle.
• By 2016, about 25 percent of new
business software purchases will be
service-enabled (SaaS) software and this
type of delivery will constitute about 14.9
percent of all software spending and 18
percent of all applications spending.
• SaaS is expected to contribute more
than 40 percent of the incremental
growth in the software market between
2012 and 2016.
“Sometimes we have these strange
conversations, comparing the capabilities
of handheld device apps versus the
capabilities of enterprise apps,” says
NetSuite’s’ McGeever. “For us, the value
comparison is between on-premise
versus SaaS.”
In Japan, companies use free apps as
advertisements to attract customers, says
Tatsuo Otsuka, president of the Japanese
software distributor K.K. Ashisuto.
“The goal is to achieve a large number
of downloads so the software company
becomes attractive as an acquisition by
larger companies.”
What happens to the price of the software
after the acquisition? It’s great to have a
huge number of customers, but they aren’t
worth much if they aren’t buying anything.
Many enterprise software vendors
are trying a variation of the loss-
leader approach. For example, offer free
mobile apps that give users a taste of the
functionality, but require an enterprise
license to get the whole package.
BMC Software, No. 19 on the Global 100,
agrees this approach is one way to make
powerful and useful applications, which
still need to be maintained by IT, directly
available to end users. “We see a lot of
potential in delivering services across
mobile devices,” says Ken Berryman,
senior vice president of strategy and
14 PwC Global 100 Software Leaders May 2013
corporate development at BMC. “But those
services require a connection to a back-end
database or system.”
An example is depositing a check by taking
a photo of it with a mobile phone. The
back-end processing was already in place,
then some IT person had a bright idea:
“Everybody has mobile phones with the
same resolution as or higher than the typical
ATM that they use for deposits, so why
don’t we just extend that?” Berryman says.
Creative thinking and a willingness to
experiment are clearly the way forward for
software vendors wrestling with the various
implications and changing user expectations
caused by the consumerisation of IT. In his
recent book, Consumption Economics: The
New Rules of Tech, J.B. Wood, president
and CEO of the Technology Services
Industry Association (TSIA), sums up how
the industry will react to the new realities:
“The net result of the cloud is that
software companies’ financial results “The goal is to achieve
now align much more closely with that of a large number of
their customers: ‘No use, no pay’. And we downloads so the
are not far from ‘no value, no pay’. This
will be game changing because few on-
software company
premise software companies even know becomes attractive
how successful their average customer is as an acquisition by
at deriving real business value from their larger companies.”
technology, and far fewer actually have the
Tatsuo Otsuka
ability to engage post ‘go-live’ to ensure
K.K. Ashisuto
those results. We are still trying to figure
out what that next generation ’outcome
driven’ operating model looks like.”
“We see a lot of potential in delivering
services across mobile devices, but
those services require a connection to a
back-end database or system.”
Ken Berryman
BMC Software
North America 100
Patrick Pugh
US Software and Internet Leader
patrick.pugh@us.pwc.com
+1 206 398 3008
US-based companies continue to lead in
terms of revenue on both the global and
North American lists of software vendors.
In fact, the list of top 10 North American
companies closely mirrors the global
top 10, with the exception of SAP and
Ericsson, which are numbers 4 and 5 on
the Global list.
The US position in the global software
industry is unlikely to change for quite
some time. However, we can already see
how the trends outlined in this report may
shake up the list and leaders. Salesforce.
com, which practically invented the SaaS
model and which went public less than 10
years ago, was the 13th largest software
provider in North America in 2011. We
will continue to see the rise of new players
in the North American software sector
and those organisations will demonstrate
business models and value propositions
that are significantly different from those
of more traditional software companies.
These powerful newcomers, as well as
companies from emerging markets, will
increasingly challenge the dominance
of the large North American vendors.
Unencumbered by legacy infrastructures
and business models, these new entrants
will be able to embrace new technologies
(some of which, ironically, were developed
by large established players) and be
far more agile in responding to market
trends and evolving customer demands
and expectations. While established
vendors have scale-enabled advantages,
deep pockets and a long-standing base of
customers, many are struggling to adapt
to the new trends and technologies as they
serve their existing base, from which they
still derive the lion’s share of their revenue.
To prevail in the face of these challenges,
the traditional North American vendors
have two primary avenues for growth:
1. Successfully shift their business models
to incorporate SaaS, social enterprise, IT
consumerisation and data analytics (and
the structural changes these entail).
They must be innovative in revamping
their organisations and processes,
including sales, marketing, distribution,
pricing, service and support.
2. Continue to expand globally. There,
too, companies that can innovate, in
particular by tailoring their software
May 2013 PwC Global 100 Software Leaders 15
offerings to specific vertical markets
and/or geographic regions, will excel.
In fact, PwC is working with many large
North American vendors to help them
transform their business models to
accommodate the new realities of the SaaS
environment. We have provided a software
pricing framework as well as key tactical
templates for crucial processes such as
the entire ‘quote to cash’ cycle. We have
already helped many companies change
everything from how they initially engage
with customers through after-sale service
and support.
Indeed, the entire industry is engaging
in a dramatic cycle of innovation, not
just in products but in business models
and business processes. These forms of
innovation, in the long run, will keep the
entire industry healthy.
Please contact me or the other practice
leaders in this report if you have questions
or would like to discuss how we can help
your organisation realise the opportunities
made available by this period of
significant change.
North America 100

2011 software 2011 total Software 2011 software 2011 total Software
Country Country
Rank Company revenue revenue revenue as Rank Company revenue revenue revenue as
HQ HQ
(CAP US$M) (CAP US$M) % of total (CAP US$M) (CAP US$M) % of total
1 Microsoft US $57,668.40 $72,052.00 80% 26 Teradata US $982.59 $2,362.00 42%
2 IBM US $28,187.75 $106,916.00 26% 27 PTC US $943.99 $1,220.10 77%
3 Oracle US $26,175.89 $47,659.33 55% 28 Red Hat US $934.80 $1,100.00 85%
4 Symantec US $6,330.31 $6,722.00 94% 29 OpenText Canada $923.60 $1,157.90 80%
5 HP US $5,316.26 $125,734.33 4% 30 Mentor Graphics US $905.84 $1,010.29 90%
6 EMC (excluding Vmware) US $4,884.92 $20,007.50 24% 31 Attachmate US $904.71 $970.64 93%
7 CA Technologies US $4,375.31 $4,754.00 92% 32 Avaya US $884.37 $5,547.00 16%
8 Adobe US $4,154.07 $4,223.70 98% 33 Nuance Communications US $849.65 $1,375.56 62%
9 VMware US $3,485.83 $3,767.00 93% 34 Quest Software* US $800.71 $857.00 93%
10 SAS US $2,524.87 $2,725.00 93% 35 Compuware US $780.90 $993.00 79%
11 Intuit US $2,456.47 $4,007.00 61% 36 TIBCO US $717.68 $932.00 77%
12 Autodesk US $2,120.03 $2,194.03 97% 37 Cerner US $701.34 $2,203.15 32%
13 Salesforce.com US $2,008.69 $2,208.25 91% 38 Ansys US $671.36 $691.45 97%
14 BMC Software US $1,961.70 $2,169.50 90% 39 Informatica US $667.73 $784.00 85%
15 Infor US $1,889.60 $2,131.36 89% 40 Intergraph* US $622.80 $1,037.80 60%
16 Cisco US $1,796.85 $44,471.00 4% 41 Google US $575.62 $37,905.00 2%
17 Intel US $1,704.52 $53,999.00 3% 42 Fidelity National US $574.66 $5,751.30 10%
18 Citrix US $1,644.71 $2,206.50 75% 43 Hitachi Data Systems US $564.40 $687.11 82%
19 SunGard US $1,471.45 $4,499.00 33% 44 Fiserv US $542.06 $4,337.00 12%
20 Synopsys US $1,459.72 $1,576.14 93% 45 Kronos US $538.00 $823.00 65%
21 McKesson US $1,357.87 $3,326.00 41% 46 ADP US $523.94 $10,349.90 5%
22 Apple US $1,355.39 $127,841.00 1% 47 FICO (formerly Fair Isaac) US $517.37 $634.10 82%
23 NetApp US $1,289.92 $5,925.00 22% 48 Bentley Systems US $514.08 $523.00 98%
24 ESRI US $1,138.72 $1,439.00 79% 49 Micros Systems US $503.99 $1,052.89 48%
25 Cadence Design Systems US $1,002.15 $1,149.84 87% 50 Verint Systems US $496.40 $782.65 63%

Data compiled by the Global Software Business Strategies Group at IDC. * Acquired after 2011

16 PwC Global 100 Software Leaders May 2013

 2011 software 2011 total Software 2011 software 2011 total Software
Country Country
Rank Company revenue revenue revenue as Rank Company revenue revenue revenue as
HQ HQ
(CAP US$M) (CAP US$M) % of total (CAP US$M) (CAP US$M) % of total
51 Meditech US $487.55 $545.22 89% 76 Blackbaud US $261.00 $371.25 70%
52 Progress Software US $482.70 $482.70 100% 77 Pegasystems US $255.92 $416.68 61%
53 Constellation Software Canada $468.92 $571.65 82% 78 Websense US $254.79 $364.20 70%
Genesys Telecommunications 79 Taleo* US $249.19 $308.90 81%
54 US $456.77 $565.56 81%
Laboratories
80 SuccessFactors* US $247.61 $328.95 75%
55 Pitney Bowes Software US $448.74 $5,277.97 9%
81 Axway US $226.40 $301.82 75%
56 Blackboard US $411.68 $513.69 80%
82 Jack Henry & Associates US $220.24 $993.64 22%
57 GXS US $411.21 $479.89 86%
83 Ultimate Software US $216.00 $269.20 80%
58 MicroStrategy US $401.34 $562.00 71%
84 Brooks Automation US $215.37 $630.00 34%
59 JDA Software Group US $396.70 $671.75 59%
85 SS&C Technologies US $213.32 $372.89 57%
60 Aspect Software US $384.75 $525.36 73%
86 Amazon.com US $213.20 $48,077.00 0%
61 Ariba* US $366.44 $479.08 76%
87 Kenexa* US $204.23 $282.93 72%
62 Unisys US $360.20 $3,854.00 9%
88 IntraLinks US $202.26 $213.50 95%
63 Concur Technologies US $358.51 $369.64 97%
89 Serena US $200.62 $220.00 91%
64 CommVault US $351.53 $384.00 92%
90 Thomson Reuters US $197.16 $13,810.00 1%
65 Epicor US $340.48 $477.54 71%
91 NetSuite US $192.06 $236.33 81%
66 InterSystems US $339.22 $385.00 88%
92 SolarWinds US $187.55 $198.36 95%
67 ACI Worldwide US $338.18 $465.00 73%
93 RightNow Technologies* US $185.93 $225.61 82%
68 SafeNet US $321.16 $559.19 57%
94 Hyland Software US $185.60 $214.98 86%
69 Workday US $320.00 $320.00 100%
95 Dell US $179.56 $62,288.00 0%
70 Research In Motion Canada $317.70 $19,346.00 2%
96 Vision Solutions US $176.98 $186.47 95%
71 Convergys US $307.20 $2,262.10 14%
97 Interactive Intelligence US $176.67 $209.53 84%
72 Advent Software US $298.02 $326.26 91%
98 LANDesk Software US $176.37 $226.70 78%
73 ASG Software US $263.85 $273.24 97%
99 Aspen Technology US $174.83 $223.03 78%
74 Information Builders US $262.94 $313.40 84%
100 Versata US $171.88 $339.51 51%
75 Deltek US $261.95 $340.59 77%
Total $199,746.49 $910,451.61 22%

Data compiled by the Global Software Business Strategies Group at IDC. * Acquired after 2011

May 2013 PwC Global 100 Software Leaders 17

As SaaS accelerates,
so do dilemmas
The shift in enterprise software sales
from license to services is amongst the
most significant upheavals the industry
has seen. Regardless of how quickly, or
slowly, companies make the transition to
SaaS, the evolution is extremely stressful,
creating a number of dilemmas for the
vendor. It can’t be overstated how moving
to services is highly disruptive to the
fundamental business models of mature
software companies. A migration to SaaS
is likely to affect profitability, internal
organisation, management, budgets and
customer relationships.
Because enterprise customers increasingly
pursue hybrid IT models, most large
software vendors are likely to offer
licensing and some kind of subscription
model for some time to come. “If the
customer wants a traditional license and
wants to run it themselves on premise,
then absolutely we’re happy to do it
that way,” BMC’s Berryman says. “And
if customers want it as a service, we can
offer it that way as well.”
18 PwC Global 100 Software Leaders May 2013
Enterprise customers appear to want both.
Most large enterprises, still concerned
about security and compliance issues, are
reluctant to move to the public cloud. They
prefer to host applications themselves. It
may be software as a service, but it will
be served from their data centre, not the
vendor’s. At the same time, enterprises
are slowly changing how they buy
software. In a 2012 IDC study, almost
50 percent of the 800 North American
organisations surveyed said they now look
to the cloud first when they need new or
replacement software.
“I would say 90 percent of the customers
are looking to move to SaaS, but at least 75
percent of the dollars will remain in self-
hosting for the next few years,” Red Hat’s
Whitehurst says. In 2011, Red Hat derived
2.7 percent (US$25 million) of its software
revenue from SaaS.
From the vendor’s perspective,
maintaining both traditional licensing
and SaaS is likely to be a burden. By
straddling different business models
simultaneously, companies incur the costs
and complexities of both. For example, “Customers don’t want to
maintaining both requires some agility in buy licenses. They just want
pricing and sales compensation. the services, purchased on
In addition, vendors are in the awkward
a utility basis.”
position of trying to justify to customers Munehiro Hashimoto
why some software is free and some is Hitachi, Ltd., Information
available as a service, while still other & Telecommunications
software requires an expensive license. Systems Company
“The market is changing and customers are
asking why software is not a service the
way hardware is a service,” says Munehiro
Hashimoto, division president, Hitachi,
Ltd., Information & Telecommunications
Systems Company, IT Platform Business
Management Division, of Hitachi, No.
20 on the Global 100. “Customers don’t
want to buy licenses. They just want the
services, purchased on a utility basis.”
It’s not only the long-established software
companies that are making a transition.
Companies that started as SaaS vendors
are evolving too. Most of them have
sold primarily to small and mid-sized
businesses (SMBs), or departments
within larger companies, rather than
directly to the enterprise. As their business
grows, they are starting to target large
enterprises and searching for strategies by
which to best serve these customers. Do
they establish direct sales for enterprise
accounts? Will the time come when the IT
departments of most large companies are
receptive to hosted solutions?
CollabNet started in the cloud, but found
over time that many large enterprises
preferred an on-premise deployment
SaaS-based business
models have yet to
demonstrate the level
of profitability of the
traditional perpetual
license model.
model due to perceived security and
compliance risks, Ensell says. “We only
had a subscription model, but we have had
to make a lot of changes to our product
delivery approach since then. Now we
have the same subscription model pricing
for both on-premise and cloud hosting.”
For many years, CollabNet focused its
sales efforts exclusively on enterprise
customers. Sales were made by an
experienced field sales force where deals
were relatively large, were minimally one-
SaaS
Traditional
licensed software
May 2013 PwC Global 100 Software Leaders 19
year subscriptions and could take months
to close. The acquisition of another cloud
development company with a high velocity
on-line trial and inside sales model that
targeted SMB’s and small workgroups
brought radical change and huge upside
potential to the organisation, Ensell says.
Specifically, the company had to handle
no-touch to low-touch customer purchases,
some free offerings to encourage adoption,
shorter sales cycles, monthly versus annual
subscriptions and navigating channel
conflicts between this new channel and
the more established enterprise sales
organisation. “We are putting a lot of focus
on how we grow these web-based, high
velocity sales into more and more large
scale enterprise opportunities. Providing
an offering that seeds the workgroup
in a high velocity way and scales to
the enterprise over time represents
tremendous growth potential for us.”
The mix of models, particularly the shift
to SaaS, also impacts profit margins. One
senior executive noted that the industry’s
profitability is likely to decrease because
SaaS has lower margins and because
any services offered on top are likely
to have lower margins than traditional
licensed software.
In fact, recent studies of the profitability
of mature license models and emerging
SaaS models by PwC find best-in-class
SaaS models only generate one-fourth the
profitability of best-in-class license models.
K.K. Ashisuto’s Otsuka believes this
profitability dilemma could resolve
itself because the increased number of
customers with SaaS offsets the lower
margins. “Low-cost apps mean that
the vendors are attracting a lot more
customers and users, so it probably comes
out roughly even,” he says.
Adobe’s Garrett notes two key advantages
of the subscription model—stable revenue
streams and increased revenue from
broadening the user base and keeping
the user base current. “The most exciting
thing is we’ve got the opportunity to take
a US$4.5-billion company and shift the
business model in a way that will drive
faster growth both on the topline and
the bottom line, with much, much more
predictable revenue.”
Most large software companies are just
beginning to wrestle with these issues;
many have not started yet. They still get
most software revenue from traditional
licensing to enterprise IT.
According to IDC, the 10 largest software
companies grew perpetual license revenue
an average of 14 percent from 2010 to 2011.
However, IDC found that perpetual license
revenue has been shrinking as a proportion
of total software revenue since 2004.
20 PwC Global 100 Software Leaders May 2013
IDC expects 4 percent compound annual
growth in license revenue for 2012-2016. In
contrast, IDC projects subscription revenue
(including SaaS and other subscription
models) to grow at a 17.5-percent rate
during the same period, reaching 24
percent of total software revenue by 2016.
It remains to be seen if the industry meets
that projection. In 2011, SaaS revenue
only accounted for an estimated 4.9
percent (more than US$11.9 billion) of
the total US$243.0 billion in revenues
of the Global 100 (Pages 10-11). The top
$11
US billion
SaaS revenue
US
Global Leaders’ revenue
5%
of
Global Software
Leaders’ total
revenue is SaaS.
four—Microsoft, IBM, Oracle and SAP—
each derived less than 2 percent of 2011 “We are working with our
software revenue from SaaS. Amongst the customers on SaaS and
top 10, only two—Symantec (No. 6) and mobile-based products
Adobe (No. 10)—approached 10 percent.
In all, 33 companies on the Global 100
to better serve their
each derived less than 1 percent of their evolving workflows.”
2011 software revenue from SaaS; 65 Les Elby
derived less than 5 percent. Vice President of
Business Strategy, AVEVA
Godfrey Sullivan, chairman and CEO of No. 47, EMEA 100
Splunk, a US-based company that provides
cloud-based and on-premise software to
help companies analyse their Big Data,
“SaaS is benefitting us. It
is a great option for our
clients who prefer Opex
Global 100 to Capex. It helps us
offer better demos and
Software revenue
reduces our sales cycles.”
Diwakar Nigam
Managing Director of
Newgen Software
$243
No. 62, Emerging Markets 100
billion total
 doesn’t expect SaaS revenue to reach huge via SaaS, including Intuit (No. 14), with The impact of the shifting revenue mix
proportions anytime soon, except perhaps an estimated US$950 million, nearly cannot be overstated. “Most publicly-held
in one or two segments—CRM and HR for 39 percent, and Cisco (No. 23), with an software company CEOs face a very real
example. “To think that the industry will estimated US$830 million, more than conflict,” says TSIA’s Wood. “Customers
somehow transform itself to a 50 percent 46 percent. are demanding a new model, while the
mix of SaaS in the next three years is financial community can’t let go of the
“We’ve taken our probably reaching. But, maybe 20 percent SaaS revenue accounted for at least old one.”
cloud offering could happen.” 40 percent of software revenue for 10
global. In addition companies on the Global 100 (Figure 2: The transition involves two big changes
A closer look at the Global 100 does Top 10 SaaS vendors as % of revenue Wall Street does not like, he explains. First,
to signing new suggest the shift that is occurring. Several amongst Global 100). revenue will no longer be booked in the
customers, we companies in the top 25 derive substantial big pay-up-front license deals we have
are also seeing a revenue from SaaS. Salesforce (No. 18), Even some vendors whose SaaS revenue come to know, rather in smaller monthly
healthy trend of which essentially invented the model, is a tiny portion of their total revenue subscriptions fees. The second change is
our on-premise had the most with an estimated US$1.8 reap large amounts in real terms from the cost of supporting the new capabilities
customers moving billion, or 92 percent of its software the model. (See Figure 1: Top 10 SaaS that are required to consistently drive the
revenue. Several others now also earn a revenues amongst the Global 100, in high consuming customer. “Add those
to cloud.” large percentage of their software revenue Introduction on page 9) two together and you have a transition
Virender Aggarwal period that is not attractive,” Wood says.
CEO, Ramco Systems “But what is not appropriately valued is
No. 64, Emerging Figure 2:  Top 10 SaaS vendors as % of revenue amongst Global 100 how the ‘old model’ company looks on
Markets 100 the other side of the transition. They will
Country SaaS revenue as % 2011 SaaS 2011 software
Company
HQ of software revenue revenue (US$M) revenue (US$M) be higher growth and more in line with
Blackboard US 96.2% $396.00 $411.68
customer demand.”
“As mobility is growing Salesforce.com US 92.0% $1,848.00 $2,008.69
really fast, cloud becomes It remains to be seen if companies will
GXS US 85.1% $350.00 $411.21
suffer lower stock valuations as they
the back office of mobility. It Google US 80.3% $462.00 $575.62 proceed through this transition, but Wood
is key for competitiveness.” Concur Technologies US 76.4% $274.00 $358.51 says they should not, pointing out that the
Patrick Bertrand Ariba US 70.7% $259.00 $366.44 top SaaS-based companies have higher
CEO, Cegid, No. 39, EMEA 100 Cegedim France 51.2% $190.00 $371.39 multiples because of the model than
Unisys US 46.4% $167.00 $360.20 software companies with the traditional
Cisco US 46.3% $831.00 $1,796.85 model. “Why should the stock price tank
DATEV Germany 40.5% $395.00 $974.17 while management does the right long-
term thing for both the customer and,
Total 68% $5,172.00 $7,634.76 ultimately, the shareholder?” he adds.

May 2013 PwC Global 100 Software Leaders 21

EMEA 100
More than many other sectors, the software
industry is constantly under pressure to
change, innovate, grow, develop emerging
technologies and transform their business
models. At the same time, software is
becoming ever more pervasive, involved
in every aspect of not only businesses and
enterprises, but also everyday life. Hence
the competition for traditional EMEA
software vendors increasingly comes
from other sectors, including industrial
products, telecommunications, engineering
and aerospace/defence that are all
acquiring software vendors and providing
more and more software functionality at
each level of their product offering.
Even if European software vendors do not
operate in a vibrant economic area, Europe
represents a growing, fast moving and
innovative market totaling approximately
30 percent of the worldwide software
Pierre Marty spending. Unsurprisingly, sector
European Software Leader concentration is the dominant
characteristic of the EMEA ranking, with
pierre.marty@fr.pwc.com SAP alone representing 30 percent of the
+ 33 1 56 57 58 15 EMEA 100’s overall revenues, and the top
10 accounting for 67 percent of that total.
Geographically, three local markets in
Western Europe—Germany, France and
the UK—continue to host most of the
software vendors in EMEA, representing
64 percent of the revenue and 51 of the top
100 companies in the region. Other areas
heavily represented include Scandinavia,
Benelux and Eastern Europe.
Yet only a handful of players have reached
critical mass, and just a few—SAP, Ericsson,
Siemens and Dassault Systèmes, for
example—are recognised as global brands.
But 27 are listed in the global ranking,
which is not insignificant. And many
European software vendors, while still
small in size, have become de facto global
companies with the bulk of their revenue
generated outside their home country.
The software industry in Europe has to
overcome at least three challenges not
faced by its US counterpart:
First, circumstances differ vastly from
country to country, making it more
difficult to roll out a solution to the entire
market. Software that is relevant to one
market may not be compliant with the
laws or practices of another European
country. As well as needing to adapt the
product to the country, small vendors
May 2013 PwC Global 100 Software Leaders 23
hoping to expand abroad find it much
harder to establish an efficient and
manageable distribution network;
Second, access to stable long-term capital
is more complex in Europe, and this is one
of the biggest stumbling blocks to broader
emergence of major players in the region;
Finally, companies in the sector would
benefit from legislation that would
promote small businesses as well as
reducing complexities and promoting
regulatory harmonisation in Europe.
The emergence of new players with
critical mass, therefore, remains a priority,
leveraging the key strengths of the region
that should act as catalysts for the software
industry: a talented pool of educated
engineers, deep pockets of diversity that
promote creativity, favourable R&D tax
credits in certain countries, the quality of
infrastructures and a vibrant community
of innovative start ups. As you look to see
how your company can take advantage of
these market strengths, please contact me
or the other practice leaders in this report
if you have questions or would like to
discuss how we can help your organisation.
EMEA 100

2011 software 2011 total Software 2011 software 2011 total Software
Country Country
Rank Company revenue revenue revenue as Rank Company revenue revenue revenue as
HQ HQ
(US$M) (US$M) % of total (US$M) (US$M) % of total
1 SAP Germany $15,498.14 $19,794.98 78% 26 Sophos UK $366.01 $390.00 94%
2 Ericssonû Sweden $8,034.67 $34,933.33 23% 27 CompuGROUP Holding Germany $340.98 $551.57 62%
3 Siemens Germany $2,369.74 $102,250.44 2% 28 Check Point Software Technologies Israel $327.37 $1,246.99 26%
4 Dassault Systèmes France $2,235.61 $2,479.94 90% 29 Temenos Switzerland $313.21 $473.47 66%
5 Sage UK $1,871.63 $2,138.91 88% 30 1C Russia $297.02 $360.05 82%
6 Hexagon Sweden $1,103.50 $3,016.95 37% 31 QlikTech Sweden $293.53 $320.62 92%
7 DATEV Germany $974.17 $1,016.44 96% 32 ABB Switzerland $293.10 $37,990.00 1%
8 Software AG Germany $948.11 $1,527.60 62% 33 Zucchetti Italy $291.44 $356.06 82%
9 Wolters Kluwer Netherlands $839.70 $4,665.01 18% 34 Alcatel-Lucent France $288.72 $19,884.00 1%
10 Wincor Nixdorf Germany $682.89 $3,237.97 21% 35 Murex France $265.38 $442.30 60%
11 Siemens Enterprise Communications Germany $639.64 $2,920.85 22% 36 Exact Netherlands $249.22 $299.87 83%
12 Kaspersky Lab Russia $613.04 $615.43 100% 37 Sopra Group France $230.74 $1,460.78 16%
13 SWIFT Belgium $568.49 $738.56 77% 38 Kofax UK $224.00 $257.04 87%
14 Acision UK $474.11 $711.17 67% 39 Cegid Group France $220.70 $366.91 60%
15 Misys UK $473.51 $575.41 82% 40 Nemetschek Germany $216.60 $228.10 95%
16 NICE Systems Israel $452.48 $793.83 57% 41 AVG Technologies Czech Republic $211.90 $272.40 78%
17 Unit4 Netherlands $418.20 $632.43 66% 42 IFS Sweden $206.55 $396.60 52%
18 AGFA HealthCare Belgium $415.00 $1,637.06 25% 43 Avaloq Switzerland $202.92 $405.84 50%
19 Micro Focus UK $412.03 $434.80 95% 44 F-Secure Finland $197.94 $203.11 97%
20 Invensys UK $387.50 $4,070.67 10% 45 ESET Slovakia $197.56 $207.44 95%
21 Northgate Information Solutions UK $375.90 $1,118.72 34% 46 Torex* UK $197.11 $217.24 91%
22 Visma Norway $374.51 $916.52 41% 47 AVEVA Group UK $191.68 $314.13 61%
23 Amdocs Israel $371.88 $3,177.73 12% 48 SimCorp Denmark $183.36 $270.35 68%
24 Cegedim France $371.39 $1,267.79 29% 49 Panda Security Spain $167.02 $180.39 93%
25 Fidessa UK $366.13 $446.19 82% 50 Experian Ireland $161.69 $4,487.00 4%

Data compiled by the Global Software Business Strategies Group at IDC. û Sourced from Ericsson’s 2011 Annual Report rather than from IDC
* Acquired after 2011

24 PwC Global 100 Software Leaders May 2013

 2011 software 2011 total Software 2011 software 2011 total Software
Country Country
Rank Company revenue revenue revenue as Rank Company revenue revenue revenue as
HQ HQ
(US$M) (US$M) % of total (US$M) (US$M) % of total
51 IRIS Software UK $158.26 $196.18 81% 76 Digia Finland $84.77 $169.55 50%
52 Centric Netherlands $156.59 $735.91 21% 77 Opera Software Norway $77.00 $159.95 48%
53 Swisslog Switzerland $147.81 $647.99 23% 78 Comarch Poland $76.69 $264.86 29%
54 Bull SAS France $147.54 $1,809.53 8% 79 Lectra France $76.58 $286.38 27%
55 GAD Germany $147.31 $573.04 26% 80 Comptel Finland $74.97 $106.82 70%
56 Avanquest Software France $133.85 $140.90 95% 81 Reply Italy $73.95 $612.40 12%
57 Civica UK $133.79 $292.92 46% 82 ISAGRI France $72.33 $169.69 43%
58 Total Specific Solutions Netherlands $130.02 $273.56 48% 83 ReadSoft Sweden $68.69 $102.08 67%
59 Anite UK $126.82 $196.40 65% 84 UC4 Software Austria $68.22 $76.00 90%
60 Telvent* France $121.51 $1,157.21 11% 85 Avast Software Czech Rep. $68.07 $73.21 93%
61 SDL International UK $118.00 $367.15 32% 86 Kewill Systems UK $66.85 $87.22 77%
62 Asseco Group Poland $116.43 $1,672.13 7% 87 COR&FJA Germany $66.18 $188.05 35%
63 Bit Defender Romania $107.16 $115.05 93% 88 ISIS Papyrus Austria $64.47 $85.96 75%
64 Orc Software Sweden $106.28 $142.12 75% 89 Personal & Informatik Germany $63.78 $98.20 65%
65 Aditro Sweden $104.82 $294.87 36% 90 Gruppo Engineering Italy $61.20 $1,078.90 6%
66 Basware Finland $102.27 $149.87 68% 91 Emailvision France $61.16 $90.00 68%
67 Advanced Computer Software UK $100.38 $157.44 64% 92 Generix Group France $58.14 $89.38 65%
68 GFI Informatique France $99.01 $859.70 12% 93 Delcam UK $56.69 $67.18 84%
69 ESI Group France $95.69 $131.02 73% 94 PSI Germany $56.37 $235.75 24%
70 Linedata Services France $95.49 $190.98 50% 95 HR Access France $56.24 $106.49 53%
71 Gemalto Netherlands $95.01 $2,803.18 3% 96 Alterian UK $54.42 $55.15 99%
72 Vizrt Norway $94.85 $125.30 76% 97 Norman ASA Norway $53.94 $62.03 87%
73 ERI Bancaire Switzerland $94.40 $110.99 85% 98 AFAS ERP Software Netherlands $52.67 $78.22 67%
74 Seeburger Germany $87.11 $113.24 77% 99 Berger-Levrault France $51.46 $132.13 39%
75 Lumesse UK $84.90 $106.12 80% 100 Sitecore Denmark $50.00 $63.71 78%

Total $51,927.87 $284,603.08 18%

Data compiled by the Global Software Business Strategies Group at IDC. * Acquired after 2011

May 2013 PwC Global 100 Software Leaders 25

Using data analytics externally
and internally
Whatever its challenges, SaaS delivers
something valuable that licenses cannot
do as easily. The metered usage patterns
typical of SaaS enables instant feedback
from users, giving vendors an opportunity
to gather and analyse reams of data about
how their products are used or not used,
data they can apply to improving existing
products, providing better tech support
and developing new products and features.
“Big Data is starting to revolutionise
the software industry,” says Bertrand
Diard, co-founder and CEO of Talend, a
French company that develops various
Big Data solutions, which it sells on a
subscription basis.
Big Data is not just for software companies
of course, but increasingly permeates
almost every industry. Data analytics
potentially makes every company a
software company when it embeds the
necessary technology into its products to
make them part of the Internet of Things.
Nike puts sensors in its shoes to collect data
to help you improve your performance.
GE and Airbus equip their jet engines with
sensors and software that allows them to
gather and transmit data to increase safety
26 PwC Global 100 Software Leaders May 2013
and efficiency. Depending on how they
choose to charge for these services, they
could find themselves in the subscription
software business. We won’t be surprised
to see a Nike or GE or some other non-
traditional ‘software’ company join the
Global 100 list in the future.
In this context, Dassault’s Charlès says
digitisation does not only mean that a
company converts all paper documents
to digital files. “Businesses tend to realise
that digitising means understanding
business processes and behaviours,
representing and sharing the enterprise
model to foster social innovation.”
“All industries are impacted,” Diard says.
For example, French electricity distributor
EDF has upgraded to smart meters. And,
“BMW’s new car has more than 800 IP
addresses,” he says.
Then there are companies that already
have a ton of data about their customers.
“Companies like telecoms and banks will
choose to take advantage of their corporate
Big Data in a variety of ways,” says Splunk’s
Sullivan. “Some of that will be through
custom-build projects that you could say
are either complimentary or competitive
to what we do, but I don’t think we’ll see “Companies like
those companies launch a competitive telecoms and banks
offering. Instead, I suspect we will see will choose to take
more custom builds that would pose an
alternative to using our software.”
advantage of their
corporate Big Data
But the biggest immediate impact of in a variety of ways.”
analytics may be how software companies Godfrey Sullivan
use analytics internally, to create and Splunk
enhance their connection with customers
and to improve the efficiency and
effectiveness of their own operations.
Infosys, No. 27 on the Emerging Markets
“Big Data is starting
100 (Pages 30-31), used analytics to make to revolutionise the
sure it was deploying sales efforts most software industry.”
profitably. It analysed lifetime revenues Bertrand Diard
of clients and discovered that sales Talend
had drifted from a focus on the largest
enterprises to some mid-sized businesses.
The analysis also highlighted how many
resources these smaller accounts typically
consumed. In the mid-sized accounts,
“we’d do a project or two and then they
went away,” says Basab Pradhan, senior
vice president and head of global sales
and a member of the executive council at
Infosys. “They were clearly unsustainable
accounts,” so the company tweaked its

“The cloud allows us to
participate in the value
creation through software.”
Basab Pradhan
Infosys
compensation system to incentivise the
opening or expanding of business with
Global 2000 accounts, he says.
Becher used data to fine tune SAP’s
strategy for its SAPPHIRE NOW
conferences, which draw 500,000
attendees worldwide each year. Becher,
who joined SAP in 2007, wondered to what
extent the enormous attendance at such
events translated into sales, so he analysed
the data. As attendees opt in, SAP collects
information on what they do while there.
What sessions do they attend? How long
do they stay? Rather than gauging the
success just by the numbers of attendees,
Becher correlated certain conference data
with sales data. The goal was to determine
whether and how conference attendance
accelerated the closing of a sale. The
analysis indeed highlighted some patterns.
For example, attendance by certain
types of customers at certain sessions
accelerated certain types of sales. “So that
has changed our definition of success,”
Becher says.
At least some companies—often those
with a service provider background or
that provide a platform as a service—
are incorporating analytics and other
capabilities as part of their SaaS. Infosys
sees this as a growth area. “We believe that
the cloud breaks down the barrier between
a software company and a services
May 2013 PwC Global 100 Software Leaders 27
company,” Pradhan says. “The cloud allows
us to participate in the value creation
through software.”
Infosys has a transaction-processing
platform for financial services companies.
“On top of that we might offer
reconciliation services, which takes care of
the exception processing so the customer
doesn’t have to do that in house,” Pradhan
says. Or perhaps the customer doesn’t have
the technical capability, which is often
the case in the competitive field of data
analytics. One Infosys product for retailers,
for example, takes data on purchasing
patterns and uses an algorithm to make
recommendations to consumers, just like
Amazon and Netflix. “We’re paid by value
that we create for the online store and it’s
completely in the cloud.”
Data analytics could open up whole new
business opportunities for non-traditional
software industry players, too. The Big
Data and analytics interest of banks,
telecommunications carriers, clothing
companies and others once tangential to
the software industry raises a big question
about data ownership. Could an athletic
footwear company aggregate sensor data
from its customers’ feet and resell it or
even use it to do predictive analytics that
it could then resell? These are questions
the industry has only begun to ask, let
alone answer.
Consolidation
Mergers and acquisitions in the software
industry continued in 2012, but there
was nothing in the range of Microsoft’s
US$9-billion purchase of Skype in 2011.
Most of the 2012 acquisitions involved
the purchase of ‘tuck-ins,’ in which
large players acquire small ones to fill
voids in emerging technologies. The
acquisition of Nicira by VMware, No. 11
on the Global 100, and Cisco’s recent
string of acquisitions can be viewed as
tuck-ins to get into the software-defined
network business.
“To stay ahead, leaders will need to buy
innovation,” says Jamal Labed, co-founder
and CEO of EasyVista, a France-based
company that develops and sells cloud-
based IT management solutions on the
SaaS model.
With large vendors sitting on mountains of
cash, it’s easier and faster to buy start-ups
than to try to develop new technology
from scratch. “Corporate balance sheets
are full of cash, so companies will need
to decide whether to use the money for
dividends or to do something with it, like
acquisitions,” says Vin Murria, CEO of
Advanced Computer Software, No. 67 on
28 PwC Global 100 Software Leaders May 2013
the EMEA 100 (Pages 24-25). Acquisitions
are not only an R&D strategy, but also
a good way to build a SaaS ecosystem
and to acquire top talent. In fact, as the
traditional vendors shift to SaaS, they
aren’t likely to cannibalise their own
customers. Most of their SaaS revenue is
likely to come from the customers they get
through acquisition.
For their part, small companies are
eager to find big buyers in order to grow.
“Achieving scale is key to the software
industry,” says Evan Puzey, chief
marketing officer at Kewill Systems, No.
86 on the EMEA 100. “Getting it through
organic growth over the last few years,
for most companies, has been difficult,
particularly in Europe and the US. So,
many are looking at M&A to provide
additional growth.”
Several acquisitions over the last 12 to
18 months illustrate how established
software players are buying their way
into the cloud and SaaS business. SAP
bought SuccessFactors for US$3.3 billion
and Ariba for US$4.4 billion, which
are cloud plays in human resources
and procurement, respectively—two
“Achieving scale is key to
the software industry.”
Evan Puzey
Kewill Systems
“Corporate balance
areas where SaaS has gained the widest sheets are full of cash,
acceptance. Oracle bought Taleo, another so companies will need
HR SaaS provider, for US$1.8 billion. And to decide whether to use
Microsoft paid US$1.2 billion for social the money for dividends
enterprise platform Yammer. or to do something with
(Ariba, No. 90 on the Global 100;
it, like acquisitions.”
Taleo, No. 79 on the North America Vin Murria
100; and SuccessFactors, No. 80 on the Advanced Computer Software
North America 100, are amongst the
companies in our rankings that were
acquired after 2011, the year on which
“To stay ahead,
the lists are based.)
leaders will need
Acquiring SaaS-based companies might be to buy innovation.”
a viable strategy for established software Jamal Labed
vendors to enter SaaS, but it does not EasyVista
solve the SaaS business model dilemmas.
Once SaaS capabilities are acquired, “then
what?” TSIA’s Wood asks. “Buy and keep
separate? Buy and integrate into the core?
Buy and let the acquisition eat the core?
These are the options and there is not yet
a proven winning model. At some point, it
has to reach the core.”
Emerging Markets 100
Greg Unsworth
Asia-Pacific Technology Leader
greg.unsworth@sg.pwc.com
+65 6236 3738
Not surprisingly, China and India feature
heavily in the Emerging Markets 100,
although what is interesting is the
contribution from emerging tech centres
of innovation such as Israel, Russia,
Brazil and parts of Eastern Europe. These
represent ‘hotbeds’ of creativity with
growing ecosystems of VC funding and
other support that will help drive success
in these new markets.
Despite representing a relatively low
proportion of the Global 100, emerging
territory companies continue to grow
quickly. In many cases, they are developing
leading-edge technologies that are
embracing cloud and digital technologies,
allowing them to leapfrog the technology
development by larger established players
in bigger markets. As broadband and
mobile infrastructure improves in many of
these emerging markets, this will further
enable growth in new delivery models,
including SaaS and other subscription-
based models. This level of innovation will
continue to drive rapid growth as more
companies from emerging markets seek to
achieve success globally.
Larger established players in the US and
Europe will also increasingly seek out
‘up-and-coming’ software companies in
emerging markets as acquisition targets. It
allows them to acquire new and innovative
technologies and business models, to gain
access to key talent and, importantly, to
gain greater direct access to fast growing
markets. On the flip side, these emerging
companies will become increasingly
confident of their ability to compete with
established players. They will become
more adept at partnering with others and
addressing global market opportunities,
making them less likely to consider a sale.
Of course, challenges continue in many
of these markets. Rampant piracy, for
example, hinders industry development in
certain markets, although interestingly the
adoption of SaaS and service-based business
models based on cloud technologies
should reduce the piracy risk that plagues
traditional software licensing models. On
a positive note, with both the private and
public sectors aware of these challenges,
we are seeing continual improvement from
both a regulatory and industry standpoint.
May 2013 PwC Global 100 Software Leaders 29
In fact, governments in emerging
markets continue to focus on building
infrastructure and supporting innovation
as a way to secure future growth. In
addition, they are looking to groom talent
directly out of schools and universities. To
date, this has had mixed success, as there
continues to be a talent ‘brain drain’ to
Silicon Valley and other more established
innovation hubs. Still, with such a large
and young population to draw from, the
tide will gradually turn.
Without a doubt the emerging markets are
poised to play an increasingly pivotal role
in the global software industry. A focus
on innovation, a growing talent pool and
governmental support are just a few of this
market segment’s advantages. As you look
to see how your company can participate
in this growth, please contact me or the
other practice leaders in this report if you
have questions or would like to discuss
how we can help your organisation.
Emerging Markets 100

2011 software 2011 total Software 2011 software 2011 total Software
Country Country
Rank Company revenue revenue revenue as Rank Company revenue revenue revenue as
HQ HQ
(US$M) (US$M) % of total (US$M) (US$M) % of total
1 TOTVS Brazil $631.73 $741.00 85% 26 Subex India $89.87 $103.29 87%
2 Kaspersky Lab Russia $613.04 $615.43 100% 27 Infosys India $81.55 $6,041.00 1%
3 NICE Systems Israel $452.48 $793.83 57% 28 Linx Brazil $81.32 $95.67 85%
4 Amdocs Israel $371.88 $3,177.73 12% 29 TCS India $80.35 $9,798.18 1%
5 Neusoft China $365.16 $912.90 40% 30 Comarch Poland $76.69 $264.86 29%
6 UFIDA (name change to Yonyou in 2012) China $331.10 $651.90 51% 31 Shiji Networks China $68.64 $114.40 60%
7 Check Point Software Technologies Israel $327.37 $1,246.99 26% 32 AVAST Software Czech Republic $68.07 $73.21 93%
8 1C Russia $297.02 $360.05 82% 33 AsiaInfo-Linkage China $63.90 $463.80 14%
9 AVG Technologies (formerly Grisoft) Czech Republic $211.90 $272.40 78% 34 Shanghai Boke Information Technology China $57.50 $91.30 63%
10 ESET Slovakia $197.56 $197.56 100% 35 FT India India $57.02 $82.05 70%
11 NARI Development Technology China $184.93 $739.70 25% 36 TmaxSoft Korea $47.69 $54.52 87%
12 Teamsun China $177.60 $807.00 22% 37 Duzon Bizon Korea $45.95 $98.01 47%
13 Kingdee China $174.30 $321.00 54% 38 DSC Taiwan $44.61 $148.56 30%
14 Geodesic India $164.97 $206.47 80% 39 Tally Solutions India $39.91 $44.47 90%
15 Kingsoft China $161.20 $162.00 100% 40 Senior Sistemas Brazil $39.63 $45.97 86%
16 CDC Corp. China/Hong Kong $154.78 $329.63 47% 41 Boco Inter-Telecom China $38.64 $193.20 20%
17 Baosight China $149.80 $499.30 30% 42 Dr.Web Russia $38.32 $38.61 99%
18 Hundsun China $129.50 $166.40 78% 43 Ahnlab Korea $37.59 $93.00 40%
19 Inspur China $120.30 $300.76 40% 44 Cranes Software India $36.80 $56.79 65%
20 Mastersaf* Brazil $118.00 $140.00 84% 45 Bematech Brazil $33.93 $39.36 86%
21 OnMobile India $116.59 $123.11 95% 46 DigiwinSoft China $33.20 $75.50 44%
22 Asseco Group Poland $116.43 $1,681.36 7% 47 QM China $32.60 $219.90 15%
23 Glodon China $113.70 $118.00 96% 48 Systex Taiwan $32.42 $319.39 10%
24 Bit Defender Romania $107.16 $115.05 93% 49 NewGrand China $31.95 $63.90 50%
25 CS&S China $100.50 $373.00 27% 50 Newsky Technology China $31.65 $39.56 80%

Data compiled by the Global Software Business Strategies Group at IDC. * Acquired after 2011

30 PwC Global 100 Software Leaders May 2013

 2011 software 2011 total Software 2011 software 2011 total Software
Country Country
Rank Company revenue revenue revenue as Rank Company revenue revenue revenue as
HQ HQ
(US$M) (US$M) % of total (US$M) (US$M) % of total
51 ABBYY Russia $31.02 $33.75 92% 76 iVirtua Solutions Brazil $12.18 $14.80 82%
52 Beijing Hollybridge System Integration China $30.40 $48.30 63% 77 Eshbel Israel $11.53 $14.82 78%
53 Huawei China $29.30 $32,396.00 0.1% 78 Hashavshevet Israel $11.14 $23.57 47%
54 CVIC SE China $28.50 $190.00 15% 79 INCA Internet Korea $10.85 $13.42 81%
55 JIT China $25.80 $51.60 50% 80 Igloo Security Korea $9.80 $32.67 30%
56 PowerSI China $24.90 $35.60 70% 81 SoftCamp Korea $9.61 $10.83 89%
57 Rising China $24.30 $32.40 75% 82 Softforum Korea $9.61 $21.14 45%
58 Superdata Software Holdings China $24.20 $30.30 80% 83 Initech Korea $8.97 $30.37 30%
59 Silverlake Axis Malaysia $23.05 $100.10 23% 84 TotalSoft Romania $8.77 $27.89 31%
60 3i Infotech India $21.84 $418.94 5% 85 Educomp Solutions India $8.59 $13.18 65%
61 eAbax China $21.60 $36.00 60% 86 Benner Solutions Brazil $8.56 $9.98 86%
62 Newgen Software Technologies India $21.55 $25.78 84% 87 Red Flag China $8.00 $8.90 90%
63 ISU Ubcare Korea $21.43 $50.24 43% 88 Computacion en Accion Argentina $7.86 $9.32 84%
64 Ramco Systems India $20.81 $49.35 42% 89 Teledata Technology Solutions India $7.83 $12.82 61%
65 Persistent India $20.37 $201.67 10% 90 Sistemas Bejerman Argentina $7.52 $8.88 85%
66 Galactica Russia $19.54 $45.03 43% 91 Bitam Mexico $7.05 $8.17 86%
67 Aranda Software Colombia $18.86 $22.55 84% 92 Applied Computer Services (Hasib) Saudi Arabia $7.04 $12.78 55%
68 Positive Technologies Russia $16.50 $25.10 66% 93 EXEM Korea $6.97 $9.19 76%
69 Altibase Korea $15.31 $15.31 100% 94 Penta Security Systems Korea $6.84 $14.42 47%
70 LOGO Business Solutions Turkey $15.12 $17.45 87% 95 Brainzsquare Korea $6.67 $7.12 94%
71 KLG Systel India $14.61 $20.78 70% 96 Younglimwon Softlab Korea $6.62 $14.54 46%
72 Polaris Software Lab India $13.90 $341.35 4% 97 Hauri Korea $6.58 $9.16 72%
73 Neogrid Brazil $13.15 $15.31 86% 98 Execplan Brazil $6.11 $7.10 86%
74 SIVECO Romania $13.00 $58.78 22% 99 nKia Korea $5.75 $9.58 60%
75 Aspel Mexico $12.58 $14.57 86% 100 Likom Turkey $5.30 $6.33 84%

Total $7,906.21 $68,338.33 12%

Data compiled by the Global Software Business Strategies Group at IDC. * Acquired after 2011

May 2013 PwC Global 100 Software Leaders 31

Globalisation

Globalisation is certainly nothing new. for Emerging Markets 100). That’s a
Nevertheless, competition from emerging considerable portion of software revenue
markets could be sneaking up on some of going to companies based outside North
the more established software companies. America. It is also worth noting that five
They might look over their shoulder companies on the Emerging Markets 100
occasionally if they aren’t already doing so. are in the Global 100 (Figure 5: Emerging
markets vendors on the Global 100.)
Although North American vendors What’s more, although all the revenue from
dominate the Global 100, the EMEA 100 companies headquartered in North America
had more than US$50 billion combined, counts as North American, an increasing
with Germany the leader (Figure 3: share of it comes from international sales.
Figure 3:  Software revenue for EMEA 100 Software revenue for EMEA 100). The
By country in US$M Emerging Markets 100 had US$7.9 billion Some established North American and
$22,091 in software revenue combined, with China European vendors are clearly paying
the leader (Figure 4: Software revenue attention. Becher says the number of
competitors SAP monitors has quadrupled
in the last four years, and many of them
come from emerging regions.
For example, Shanghai Boke Information
Technology, No. 34 on the Emerging
$9,918 Markets 100, is a competitor in China.
Shen Guokang, president of the company,
says that many Chinese state-owned
$6,240 enterprises use Bokesoft products because
$4,682 they are customised for the idiosyncrasies
$2,959 of the Chinese government. Large
$1,942
$1,152 $1,051 $983 $910 multinationals like SAP naturally are at a
disadvantage at that level.
Germany Sweden UK France Netherlands Israel Switzerland Belgium Russia Others
However, this granularity of customisation
could work against a local company that
aspires to sell beyond its home market. In
contrast, a global player like SAP has the
advantage of being well-equipped to help
its clients globalise.
When it comes to globalisation, most
software companies continue to focus on
internal issues, not external competition.
One of the most common globalisation
challenges cited by vendors is maintaining
what might be called ‘cultural balance.’
That’s not just a veiled reference to a
North American bias, in which US-based
multinationals find it hard to adjust to
foreign cultures. Companies everywhere
struggle with moving beyond their
particular cultural boundaries.
The predominant Indian employee base
at Infosys can sometimes cause challenges
when moving into new markets, Pradhan
concedes. “We’re very comfortable in the
United States, but as we expand further
into continental Europe we’re realising
that we have to do business differently.”
Certain countries simply require Infosys
to adapt more to their culture, which

May 2013 PwC Global 100 Software Leaders 33

 Poland 1 Russia 2
Czech Republic 1 “We are now addressing the
Slovakia 1 significant challenge of building
Romania 1 a team that can actually deliver
China 12 to customers and support
Israel 3
2
customers in the new markets.”
India Andy Tiller
AsiaInfo-Linkage “We have seen
Emerging Markets significant
Software 100 – 2 [regional]
top 25 companies’ Brazil differences in
locations how informa-
tion is shared.”
Figure 4:  Software revenue for Emerging Markets 100 Tony Zingale
By country in US$M Jive Software
$2,738
means Infosys needs to establish a regional be to balance cultural differences and
office staffed with consultants that are the company’s cost structure, says Andy
bi-cultural: for example, comfortable in Tiller, vice president of corporate product
Germany and effective at working with marketing. “We are now addressing the
software developers in India. It’s a delicate significant challenge of building a team
balance of honoring its heritage and the that can actually deliver to customers and
advantages of being a global company, support customers in the new markets,” he
whilst maintaining respect for and even says. “One of our big strengths is our very $1,174
celebrating regional differences. low-cost base for delivering projects. If we $1,015
$945
can deliver a project with 80 percent of our $797
This issue is more than a matter of the staff in China and 20 percent in Europe,
comfort-level of employees and customers. then it’s hard to beat us on cost. But if we
As AsiaInfo-Linkage Inc., No. 33 on the had to have 80 percent of the staff in Europe $280 $256 $198 $193 $182
$129
Emerging Markets 100, expands beyond and 20 percent in China for a project, then
its home market of China, the trick will the whole thing is completely reversed.”
China Israel Russia Brazil India Czech Rep. Korea Slovakia Poland Romania Others

34 PwC Global 100 Software Leaders May 2013


“Our three top global
challenges are increasing
the managerial
bandwidth at the pace
the company has to
grow, the right entry
strategy for emerging
markets and alignment
to each market’s socio-
economic objectives.”
Bharat Goenka,
Co-founder and managing director,
Tally Solutions
No. 39, Emerging Markets 100
“Globalisation in the
software industry is
definitely accelerating.
Cloud computing,
consumerisation
and other trends are
driving globalisation.
Applications will
become global.”
Mahendra Negi
COO/CFO, Trend Micro
No. 32, Global 100
The local connections Chinese companies
naturally have is a vast competitive
advantage over companies from the
West, but it can make it difficult to move
into global markets, Tiller adds. “It’s
very difficult for Western companies to
penetrate the IT market in China. Equally,
we have a challenge coming into Western
markets. The first challenge is to make
AsiaInfo known and trusted. The second
thing is to create the ability to deliver cost
effectively in far-away markets. Almost
all of our key technical staff are Chinese,
so we are now building a team that can
actually deliver to customers and support
customers in the new markets.”
Another emerging markets challenge
to Western software vendors is the
continuing issue of rampant piracy, which
impedes the effort to monetise software
sales through traditional license models,
according to TSIA. SaaS and other merging
subscription models might help by giving
a better opportunity to monetise efforts in
these countries and should promote more
rapid progress for the software sector in
emerging countries in the future.
The cultural complexities could grow as
software includes more social networking
features. The whole concept of social
networking can differ markedly from one
region to another. Europeans, for example,
are more sensitive to privacy issues
than others.
Figure 5:  Emerging Markets 100 vendors also on the Global 100 list
Rank Company
55 TOTVS
57 Kaspersky Lab
75 NICE Systems
88 Amdocs
93 Neusoft
“In working with many large companies
in various cultures across the world, we
have seen significant differences in how
information is shared and connections
are made,” says Tony Zingale, chairman
and CEO of US-based Jive Software, a
leader in social business platforms. “But
even in these diverse businesses, there is
a consistent need in every organisation
to share, collaborate and increase
productivity and communication amongst
knowledge workers–-which is most
effectively achieved through the use of
robust social technologies.”
The search for talent, another perennial
issue, has become a global competition.
Increasingly, US companies that used to
hire mainly in Silicon Valley are looking
not only beyond California, but also
beyond the United States. Two years ago,
NetSuite opened its first development
May 2013 PwC Global 100 Software Leaders 35
2011 software
Country HQ
revenue in US$M
Brazil $631.73
Russia $613.04
Israel $452.48
Israel $371.88
China $365.16
office outside Silicon Valley, in the Czech
Republic. The driving force was not lower
costs, says McGeever, but a need for
top talent.
The recent explosion in innovation has
increased the hiring problem. In addition
to established software companies, a slew
of start-ups compete for top software
developers, and can often make offers
that young stars find hard to refuse. “You
get a lot of people who say, ‘I’m willing to
take the risk and maybe make fifty million
dollars at a start up,’” says Red Hat’s
Whitehurst. “There’s no way a mature
software company can source everyone
they want in Silicon Valley because there’s
no way you’re going to keep them all.”
Red Hat has development centres on five
continents. “We’ve got to get the talent
wherever it is. There is a global war
for talent.”
Conclusion

As cloud, SaaS, mobility and
consumerisation of IT continue to impact
the industry, perhaps the biggest danger
for software companies is to miss the forest
for the trees. The convergence of these
factors goes to the root of the industry’s
operations and its very existence. The
convergence is changing its customer base,
sales and profitability models, ecosystems
and distribution methods.
As the interviews in this article suggest,
established software companies built
on the traditional licensed on-premise
model are just starting to grapple with the
various challenges that this transformation
will require if they are to thrive in the new
environment. Amongst the key elements
they must consider are:
• sales compensation practices;
• research and development; and
• even such things as the tax implications
of the cloud.
Although the SaaS revenue mix is not
likely to approach even half of any
software segment soon, it is likely that
most new revenue will be generated via
SaaS or some other subscription model.
Vendors that believe they can simply rely
on the license model might find they have
an annuity-like revenue flow that will last
a long time, but will also shrink over time.
The implications are pretty clear. Prudent
vendors will want to tackle these issues
sooner rather than later.
value for our customers, making software
and service an integral part of social “The new round of
transformation and people’s daily lives.” competition in the
software industry
It is a tall order. Ultimately, the software
industry is morphing into an entirely new
is about business
business that is no longer a stand-alone model innovation.”
industry. What then should we call it? An Dr. Liu Jiren
ecosystem? A community? Some entirely Neusoft
new term? Whatever it’s called, the
software industry will look very different
from what we see today.

• pricing models; “The new round of competition in the

• the impact on profitability and
shareholders;
• sustaining the loyalty of customers,
which more than ever means the end
user within the enterprise;
software industry is about business model
innovation,” says Dr. Liu Jiren, chairman
and CEO of Neusoft Corp., at No. 93 the
one Chinese company on the Global 100.
“We are trying to build a sustainable
business model to provide sustainable

36 PwC Global 100 Software Leaders May 2013

Methodology
The PwC Global 100 Software Leaders
lists are based on corporate financial
statements (GAAP-based where
applicable), other public sources and
estimates for privately held companies, as
compiled for PwC by the Global Software
Business Strategies Group at IDC.
Due to variances in fiscal years, the results
were ‘calendarised’ for 2011, the most
recent year for which complete data was
available. Some companies on the lists
have since been acquired, but they remain
on the lists if they were still independent
at the end of 2011. These companies are
indicated with an asterisk (*) in the tables.
Currencies were converted to US dollars
using the average historical inter-bank
rate for 2011 as the rate of exchange.
The historical rates used can be found
at www.oanda.com.
Each table reports the company’s total
revenue and revenue from software.
Software revenue includes fees from
licenses, maintenance, subscriptions
and other software revenues, including
software as a service(SaaS). Software
revenue excludes custom software or
service revenue derived from training,
consulting and systems integration.
Further, software revenues are based
on enterprise software that is deployed
on compute servers and with clients.
The definition of software is subject to
interpretation, and the application and
usage of software continues to grow as
the number and types of devices that run
software expand. Therefore, boundaries
have been drawn on what was counted
and reported as software revenue. As a
result, there are categories of software
purposely excluded from the enterprise
software estimates, including but not
limited to software that is deployed on
gaming consoles, software deployed
with networking equipment and
software deployed on chips embedded
in automobiles (as another example of
software to which one could potentially
attribute value). Total revenue includes
software plus hardware, nonrecurring IT
service fees, business process services, etc.
Consumer gaming companies—Electronic
Arts, Activision Blizzard and Nintendo, for
example—are not included in this study.
On the Global 100 list, SaaS revenue
refers to all revenue derived from the
SaaS delivery model, a utility computing
environment in which unrelated customers
share a common application and
infrastructure managed by an independent
software vendor or a third-party service
provider that typically owns the code or
intellectual property. The model provides
access to and consumption of software and
application functionality built specifically
for network delivery and accessed by users
over the Internet.
SaaS revenues do not include software
deployed internally by the customer or
any packaged software for which a license
fee and a maintenance fee are paid. The
myriad ‘as a service’ (APPaaS, PaaS, IaaS)
offerings—including business application
services, databases, software development
tools, high-level storage services (backup
and archiving), testing as a service, and
security as a service—are all included in
the category of SaaS. A few hardware-
oriented elements of IT cloud services
are not included in the SaaS figures: bulk
storage solutions, network services and
cloud servers.
For more on these definitions see:
IDC’s Worldwide IT Cloud Services
Taxonomy, 2012
In the lists, the Country HQ column
refers to the operating headquarters in
the country where the main corporate
decisions are made. This may differ from
jurisdictions listed for tax or financial
reasons in corporate documents.
May 2013 PwC Global 100 Software Leaders 37
Besides the Global 100 Software Leaders
list, this report includes three other ‘top’
lists, two defined by geography and one
defined by market maturity:
• North America – US and Canada
• Europe, Middle East and Africa
(EMEA) – 128 countries comprising
those regions
• Emerging markets – Countries in the
Americas, Central and Eastern Europe,
Africa, Asia and the Middle East with
an emerging software development
industry. IDC started with the 21
countries on the MSCI Emerging
Markets Index, and added to it based on
its own understanding of these markets.
For more on the MSCI list, see:
www.msci.com/products/indices/
country_and_regional/em/
Given the geographic overlap between the
EMEA and the emerging markets, there
clearly are some companies that appear
on both lists—from Israel and Russia,
for example.
In addition to this quantitative research,
PwC interviewed more than 25 executives
of software companies in the US, Europe
and Asia. (See list of interviews on
page 2).
Of further interest

For more information about PwC research on software industry operational challenges and best practices,
please visit the following web pages:

The future of software pricing Experience radar 2013: Lessons from the
excellence: A series of four articles US enterprise software industry
www.pwc.com/softwarepricing http://www.pwc.com/us/en/advisory/
customer-impact/publications/lessons-from-
the-u.s.-enterprise-software-industry.jhtml

Tax policy on cloud software revenues VAT and the cloud: Understanding your VAT
http://www.pwc.com/us/en/state-local- obligation
tax/publications/pwc-taxing-cloud.jhtml http://www.pwc.com/us/en/tax-services-
multinationals/newsletters/vat/vat-cloud.jhtml

Quote to cash cycle

http://www.pwc.com/gx/en/technology/
publications/technology-industry-at-the-crossroads-
transforming-quote-to-cash-operations.jhtml

38 PwC Global 100 Software Leaders May 2013

PwC can help

PwC can help you meet the challenges of a changing software industry. Please contact any of our software industry partners listed
below to learn more about our experience and insights.

Raman Chitkara Jianbin Gao – China & Hong Kong

Global Leader
86 21 2323 3362
1 408 817 3746 gao.jianbin@cn.pwc.com
raman.chitkara@us.pwc.com

Rod Dring – Australia Xavier Cauchois – France

61 2 8266 7865 33 1 5657 10 33

rod.dring@au.pwc.com xavier.cauchois@fr.pwc.com

Estela Vieira – Brazil Werner Ballhaus – Germany

55 1 3674 3802 49 211 981 5848

estela.vieira@br.pwc.com werner.ballhaus@de.pwc.com

May 2013 PwC Global 100 Software Leaders 39

 Christopher Dulny – Canada Sanjay Dhawan – India

416 869 2355 91 80 4079 7003

christopher.dulny@ca.pwc.com sanjay.dhawan@in.pwc.com

Kenji Katsura – Japan Guy Preminger – Israel

81 90 5428 7687 972 3 7954857

kenji.katsura@jp.pwc.com guy.preminger@il.pwc.com

Hoonsoo Yoon – Korea Yury Pukha – Russia

82 2 709 0201 7 495 223 5177

hoonsoo.yoon@kr.pwc.com yury.pukha@ru.pwc.com

Ilja Linnemeijer – The Netherlands Greg Unsworth – Singapore

31 88 792 4956 65 6236 3738

ilja.linnemeijer@nl.pwc.com greg.unsworth@sg.pwc.com

40 PwC Global 100 Software Leaders May 2013

Erik Wall – Sweden Jass Sarai – UK

46 0 8 55533125 44 0 1895 52 2206

erik.wall@se.pwc.com jass.sarai@uk.pwc.com

Travis Randolph – Switzerland Tom Archer – US

41 0 58 792 9698 1 408 817 3836

travis.randolph@ch.pwc.com thomas.archer@us.pwc.com

Douglas Mahony – UAE

97 1 43043151
douglas.mahony@ae.pwc.com

May 2013 PwC Global 100 Software Leaders 41

About PwC’s Technology Institute
The Technology Institute is PwC’s global research network that studies the business
of technology and the technology of business with the purpose of creating thought
leadership that offers both fact-based analysis and experienced-based perspectives.
Technology Institute insights and viewpoints originate from active collaboration
between our professionals across the globe and their first-hand experiences working in
and with the technology industry. For more information please contact Raman Chitkara,
Global Technology Industry Leader at raman.chitkara@us.pwc.com.

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